Correlation Between Shenzhen Changfang and Suwen Electric
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By analyzing existing cross correlation between Shenzhen Changfang Light and Suwen Electric Energy, you can compare the effects of market volatilities on Shenzhen Changfang and Suwen Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shenzhen Changfang with a short position of Suwen Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Changfang and Suwen Electric.
Diversification Opportunities for Shenzhen Changfang and Suwen Electric
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shenzhen and Suwen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Changfang Light and Suwen Electric Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suwen Electric Energy and Shenzhen Changfang is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shenzhen Changfang Light are associated (or correlated) with Suwen Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suwen Electric Energy has no effect on the direction of Shenzhen Changfang i.e., Shenzhen Changfang and Suwen Electric go up and down completely randomly.
Pair Corralation between Shenzhen Changfang and Suwen Electric
Assuming the 90 days trading horizon Shenzhen Changfang Light is expected to generate 1.0 times more return on investment than Suwen Electric. However, Shenzhen Changfang Light is 1.0 times less risky than Suwen Electric. It trades about -0.13 of its potential returns per unit of risk. Suwen Electric Energy is currently generating about -0.14 per unit of risk. If you would invest 207.00 in Shenzhen Changfang Light on January 22, 2025 and sell it today you would lose (26.00) from holding Shenzhen Changfang Light or give up 12.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Changfang Light vs. Suwen Electric Energy
Performance |
| Timeline |
| Shenzhen Changfang Light |
| Suwen Electric Energy |
Shenzhen Changfang and Suwen Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Changfang and Suwen Electric
The main advantage of trading using opposite Shenzhen Changfang and Suwen Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Changfang position performs unexpectedly, Suwen Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Suwen Electric will offset losses from the drop in Suwen Electric's long position.| Shenzhen Changfang vs. Agricultural Bank of | Shenzhen Changfang vs. Industrial and Commercial | Shenzhen Changfang vs. Bank of China | Shenzhen Changfang vs. PetroChina Co Ltd |
| Suwen Electric vs. PetroChina Co Ltd | Suwen Electric vs. China Mobile Limited | Suwen Electric vs. CNOOC Limited | Suwen Electric vs. Ping An Insurance |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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